09 May State of the CHRON Union – Part 2 of 3

Hello, CHRON friends and family, you may consider this an appendage to our ‘State of the CHRON Union’ blog that followed our Q1 2017 Shareholders Conference Call last week. Picking right up where we left off and in the spirit of transparency that we always strive for, I want to take the time on this blog to elaborate a bit more on our CHRON Form 10 filing (by popular demand, of course).

“First, it was going to be a Reg A+ Filing and then you guys changed it to a Form 10 Filing…?”

If you guys remember (and I know that you do), at our last shareholder meeting we actually announced that we were going to do that, a Reg A+ filing for the purposes of raising capital. Being very honest, this was a very difficult decision for us to make – perhaps one of the most difficult decisions that I have had to make to date. I realize that the appearance of indecisiveness may look inept, however, the challenge for us here is that while each of these going-public-strategies may seem very viable in their own regard, the reality is that each of these also has implications that reach far, long, wide and deep.

As CEO, I had to weigh out the effects, impacts, obligations, and potentially negative impacts that each of these decisions could have on our company; and then of course I had to weigh out those probabilities and our own natural ability to meet those respective challenges. To add more complexity to the matter, we also found ourselves with advisors, members of professional investment community and prospective investors on both sides of the Reg A+ versus Form 10 debate.

So here are my bottom line thoughts…

The Form-10 is a very traditional strategy; all that it does is ensure that we do become an SEC fully-reporting company. Many would say, only after this level of reporting is a company a truly bonafide publicly traded company. As simple as this may sound, it is indeed very profound and very monumental. For starters, an entire new world of prospective investors has opened up for us. Secondly, this is the first major step required to get to get off of the pink sheets and onto the QB, which is our next stop.

Also, in our opinion and in the opinion of many experts on Wall Street, it also sends a signal to the professional investment community that we’re very serious about our plans to go public. We’ve gone the traditional route, we’ve filed the traditional documents, and candidly, I like what that does for our company. I believe that we are long-term play as we’ve said from the beginning, and I feel that the Form-10, from an optics perspective, will serve us well in that regard. Lastly, this is a well-defined 60-day process and according to the process, we expect that our Form 10 will be effective on or around June 20th 2017. By comparison, the Reg A+ process, in my humble opinion comes with an air of speediness and potential franticness; moreover, there are unknown elements, which will pose many forks in the road. Again, this is my humble opinion and based upon these various findings and other forms of analysis, I made the decision to go with the Form 10 strategy.

So while I am not crazy about the timing, I do believe that thanks to the patience we’ve exercised we’ve become better—now having a better focus, better understanding of what we’re doing, better equipped to discern what types of financial deals and partners we should be partnering with. Ultimately, I think that we just have a better worldview of what’s going to be best for CHRON.

Guys, we recognize that this wasn’t an easy process, but rather, one that involved many long nights burning the midnight oil, talking to several different trustworthy people and experts. Our job was to rightfully distinguish between all the messages these various parties were telling us and discern what the best route to pursue was. I believe that we have done that.

“So what’s the plan for capital now?”

Strategically, the Form-10 filing has allowed us to do is draw new parties/people out of the woodwork and initiate discussion with new financial institutions—people we haven’t yet met or gotten to know. While we’ve had great traction heretofore and we are very grateful for the prospective plans and offers we’ve entertained thus far, it is a very good thing to meet new interested parties. We want to engage with others, we want to find not just money, but the right money from the right people, and the reality is that sometimes, that just takes a little bit longer. Filing the Form 10 and being in this 60 day process truly allows us to meet and court new people.

Today, our plan is to file an S-1 and do a raise anywhere between $5 and $10 million; we plan on filing the S1 on the heels of the Form 10 becoming effective. From an operational perspective and from a marketing perspective, we believe that we have pulled off some truly incredible feats of innovation and value propositions for customers and shareholders. However, in order for us to give these the proper justice that they deserve from a “go-to-market” and “full scale launch” perspective, we have to raise the above-mentioned capital. There are some parties that we have been in talks with for a considerable time while now, others are newer parties only now learning about CHRON. Regardless of these two extremes, since the Filing of our Form 10, we have been aggressively engaged in finding the best party (or parties) for us so we can execute our strategy. Our business model and our strategic plan have gone forward, but we’re not designed to grow until we secure the first, real institutional financing. That is precisely what we’re working on right now, that’s the purpose of everything we’re doing.

We’ve built our platforms (smart controls, energy, microgrids and conservation) for incredible scale and speed – for those that have read our Form 10, you should be able to connect the dots effectively. Filing the Form 10 was definitely the beginning of a new chapter for us (in every sense…LOL). Once we file our S1 and get the capital raise out of the way, the page will have turned for us again and we believe that we will be moving into a very aggressive growth phase of our lifecycle. Once we’re underway with that aggressive growth model, then we’ll begin to put out regular projections and talk more about financials like every similarly publicly traded company. That said, as of today and until that time, our company is the sum of many fast-moving parts and we’re simply trying to get the rocket launched, so to speak.

Look for the third blog posting soon.

P.S. The picture above is from our soft road trip to New York City; this was my view from the offices of NYSE Member Company, Wellington Shields.

FORWARD-LOOKING STATEMENTS

This blog posting may contain forward-looking statements. The words “believe,” “expect,” “should,” “intend,” “estimate,” “projects,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. These forward-looking statements are based upon the company’s current expectations and are subject to a number of risks, uncertainties and assumptions. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ significantly from those expressed or implied by such forward-looking statements are risks that are detailed in the company’s filings at www.OTCMarkets.com

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